for sale by owner

An Easier Way to Home Ownership

Back in 2006 when US housing prices were peaking, home owners were laughing all the way to the banks which were in turn more than happy to provide multiple mortgage loans on the same property under the assumption that real estate valuations would continue to rise unchecked.

Soon after, the panic which emerged from cascading sub-prime mortgage loans spread like a virus through the banks, which attempted to get rid of any and all derivatives that packaged loans to less-than-ideal borrowers, on and off their books.

The financial contagion which spread through the banks was largely contained through government support, including the Troubled Asset Relief Program. The US Government pumped in more than $900 billion into targeted loans and rescue packages for the housing market. But the mayhem continued and as the paranoia regarding home loans and mortgage-backed securities spread through the financial organizations, thousands of home owners faced the gloomy prospects of losing their homes.

Soon home owners that had in many cases earlier paid off their properties only to later avail mortgage financing the banks had hitherto been dishing out, ended up without a roof or recourse until the arrival of homepath mortgage financing.

In time, the US Government has adopted various initiatives to provide relief to those struggling to keep their homes, coupled with steps to encourage new home purchases through the introduction of the homepath loan.

These loans are available on homes that had been owned by people that had gotten loans from Fannie Mae; and are appealing for potential home buyers on the lookout for financing, for multiple reasons.

Firstly, the prices of such properties are typically much lower than the market value of similar properties. This is despite the fact that most such homes are relatively new, single-family residences, townhomes and condos.

Homepath mortgage financing is also cheaper, since unlike financing obtained through banks, there are no appraisal fees attached to it. This is possible due to the fact that the price paid by the new home owner is taken as the market value of the property instead of an appraisal of similar properties to ascertain its market price.

Since there is no mortgage insurance requirement on a homepath loan, so it also chips away at the total amount borrowers must pay each month. This slice out of the mortgage payment can be significant in cases where the new home buyer has put down a relatively smaller proportion of the sale price upfront.